US FTC grants conditional approval for Sun-Ranbaxy merger deal

Sun Pharmaceutical Industries Ltd and Ranbaxy Laboratories Ltd have agreed to divest Ranbaxy’s interests in generic minocycline tablets to Torrent Pharmaceuticals Ltd in order to settle the US Federal Trade Commission (FTC) charges that Sun’s $4 billion proposed acquisition of Ranbaxy would likely be anticompetitive.
 
Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections. According to the FTC’s complaint, the proposed merger would likely harm future competition by reducing the number of suppliers in the US markets for three dosage strengths (50 mg, 75 mg, and 100 mg) of generic minocycline tablets. Ranbaxy is currently one of three suppliers of the products, while Sun is one of only a limited number of firms likely to sell generic minocycline tablets in the US in the near future. Sun Pharmaceutical’s entry likely would have resulted in significantly lower prices for these drugs.
 
“Under the proposed settlement, Sun Pharmaceutical and Ranbaxy must also sell Ranbaxy’s generic minocycline capsule assets to Torrent, to enable Torrent to achieve regulatory approval for a change in ingredient suppliers for its minocycline tablets as quickly as Ranbaxy would have been able to do in the absence of the deal. In addition, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure. The FTC has appointed an interim monitor to ensure that Torrent receives the support it needs from Sun Pharmaceutical and Ranbaxy during the divestiture process,” said FTC in a press release.
 
The FTC said that it will publish the consent agreement package in the Federal Register shortly. “The agreement will be subject to public comment for 30 days, beginning today and continuing through March 3, 2015, after which the Commission will decide whether to make the proposed consent order final,” said FTC on January 30, 2015.